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However, online revenues increased 21 per cent in the 16-week period as punters downloaded its Mecca Bingo and Blue Square sports betting apps.

Gaming through smartphones has nearly trebled compared to the same period a year ago and now accounts for 6 per cent of its online revenues.

The group recently announced plans to expand the number of its casinos to 45 by 2015, creating 1,400 jobs, through the faster roll-out of its G-Casino format, which attracts a younger, less formal crowd.

It opened a venue in Stockton-on-Tees earlier this month and outlets in south Manchester and New Brighton in Merseyside are expected to follow next year.

Mecca, which closed a Wallsend club in Tyne and Wear during the period, has seen its average spend increase following a drive to improve its food offering.

Rank said its 11 Spanish bingo halls continued to suffer following the country's introduction of a smoking ban, with revenues down 19 per cent.

Looking forward, it warned that the outlook for UK consumers was likely to be 'more challenging' in 2012.

The group was recently taken over by Malaysian-run gambling group Guoco, which now controls 74 per cent of the equity.

The shares edged up 0.75p to 127.75p in early morning trading.

Rank is currently awaiting a key ruling by the European Court of Justice
on its long-running dispute with HM Revenue and Customs over its VAT
bill. The decision is due on November 10.

View from the City

Jeffrey Harwood of broker Oriel Securities, which has a buy recommendation on the stock, said: 'The key event pending is the ECJ decision on the VAT appeal by HMRC.

'If Rank loses the case, which is most unlikely, it will be required to repay £274m plus interest. If HMRC loses its appeal then Rank will submit further claims which are estimated to be in excess of a further £275m.

'However, 2011 looks to be on target despite the worsening consumer environment. We retain our buy on long-term fundamentals but, in the short term, the ECJ ruling is such a significant and unpredictable event that the shares are best watched for now.'